“Budapest seems a wonderful place… The impression I had was that we were leaving the West and entering the East.” So begins Bram Stoker's Dracula, written in a time when the city was seen as Europe's final frontier. Today, Budapest is rather more familiar (it joined the EU in 2004) - although it has lost none of its original appeal.

Divided into two distinct parts by the River Danube – the historical Buda district, dominated by the Palace complex, and the edgier Pest District – the city has only formally existed since 1873.

In its heyday, Budapest, with Vienna, was the elegant joint imperial capital of the Austro-Hungarian Hapsburg Empire, but under 50 years of communist rule many of the grandest buildings fell into disrepair.

Today the city is a beguiling mixture of art nouveau, baroque and neo-classical masterpieces, rattling trams, bustling streets and leafy parks. But this is a working city that has not lost its gritty edge, so no wonder film crews are fighting to work here.

So whether you want beautiful buildings or open spaces, museums or theatre, opera or cinema, thermal spas or fine dining, Budapest has more than enough to keep even the most demanding visitor occupied.

Five best sights

If phoning from England, use the code 00 36. If phoning from Budapest, simply put 1 in front of the number.

1. The Szechenyi Chain Bridge

Designed by an Englishman and built by a Scot (Adam Clark, who also built the Hammersmith Bridge, which it resembles), the Szechenyi Lanchid was the first permanent link between Buda and Pest when it opened in 1849. It was also notable because the aristocracy, normally exempt from taxation, had to pay a toll to use it like ordinary citizens. As well as being the most beautiful of all the bridges across the Danube, it is the city’s most potent symbol and can be seen on countless souveniers.

2. The Castle District (Várhegy)

Buda’s most prominent feature and the site of its old town, this long plateau includes a palace, the fascinating Matyas Church, mansions, museums and picturesque squares. The streets still follow their medieval courses but the buildings are a mixture of gothic and baroque architecture.

The palace complex, which can be reached by the Siklo (daily, 7.30am-10pm) – a 19th century funicular that runs from Clark Adam ter by the Chain Bridge – includes the excellent Hungarian National Gallery.

3. Parliament (Orszaghaz)

The writer Gyula Illyés described Budapest’s vast, neo-Gothic extravaganza as “No more than a Turkish bath crossed with a Gothic chapel”. In reality, it is far more impressive.

Built between 1884 and 1902, the design by Imre Steindl was based on the Houses of Parliament in London. The country’s largest building, it is where the coronation regalia and St Stephen’s Crown, the symbol of Hungarian statehood for more than 1,000 years, are kept. Look out for the numbered cigar holders that line the windowsills outside the debating chamber.

Opened in 1884, this magnificent building, financed by the Hapsburg Emperor Franz Joseph, was designed by the celebrated Hungarian architect Miklos Ybl to rival the Europes’s great opera houses. Endless marble hallways, crystal chandeliers and acres of gilt complement the elaborate frescoes depicting Grecian allegory and belle époque fantasy that were painted by the foremost artists of the day.

This church took so long to build – more than 50 years – that the phrase “when the basilica is finished” came to mean the same as “pigs might fly”. It was worked on by three different architects, hence its eclectic style, and building was fraught with disaster – in 1868 the partially completed church collapsed. In summer you can climb to the top of the (completed) dome and enjoy spectacular views. It contains the Szent Jobb, the desiccated hand of St Stephen, which is Hungary’s holiest relic. Insert a 100-forint coin and its casket lights up.

Five best hotels

Rates are based on two sharing a double room.

1. The Four Seasons Gresham Palace

Genuinely magnificent, this palatial art nouveau (or Secessionist) masterpiece overlooking the Chain Bridge was constructed in 1906 by the Gresham Life Assurance Company. After an ambitious four-year restoration, it reopened in 2004 as the Four Seasons Gresham Palace and quickly established itself as Budapest’s premier hotel. From the sweeping mosaic hallway to the glamorous Presidential suite, each of the 179 rooms is an opulent demonstration of Hungarian craftsmanship. The café is excellent and the restaurant, Pava, is one of the city’s best.

A Budapest classic, this riverside edifice was the city’s first luxury hotel. It is attached to the extraordinary art nouveau Gellért thermal baths, the use of which is included in the price of a room. Like the baths, which are being renovated, the hotel could do with a bit of care and attention, but it is full of character. The cheaper rooms look on to the courtyard and don’t have the views – or the sounds of the trams. Excellent café.

These 16 rooms are in the former finance ministry, an impressive neo-gothic, early 20th century building overlooking the Matthias Church and the Fishermen’s Bastion. This offers one of the best deals in Budapest’s Castle District.

Situated in the middle of the Danube, Margaret Island is the city’s outdoor playground. This budget hotel is surrounded by greenery so that you forget you are in the middle of the city, and has a swimming pool and tennis courts.

Five best restaurants

Meal prices are per person, based on three courses with wine.

1. Fausto’s

Slick, stylish and expensive, the Italian haute cuisine served here has long been the choice of Budapest’s movers and shakers. The pasta is excellent, there are great choices for vegetarians and the wine list is exceptionally good.

Magnificent gilded restaurant decorated in the Gothic style. The best dishes are the traditional Hungarian and Transylvanian staples such as stuffed cabbage and goose liver. In summer you can sit on the candlelit terrace. The beer hall serves the same dishes, but at cheaper prices and in less refined surroundings. This is also the place to come for authentic gypsy music.

One of the best places in the Castle Hill area of Buda, this colourful and charming restaurant serves beluga, sevruga and red salmon caviar at a fraction of the price you would pay in the UK. Or try the Russian pickled herring, served with hot buttered potatoes and red onion.

Cafes and bars

If you go to one café it should be Gerbeaud (V. Vörösmarty ter 7-8), the most famous in Budapest.

Café Kor (V, Sas utca 17), a lively and popular bistro, is a great place for a light meal at any time of day. The waiters at Horgasztanya (I. fo utca 27) are notoriously grumpy, but it’s worth it for the best fish soup (halászlé) in town. Vörös és Fehér (VI. Andrássy ut 41) has great wine and tapas.

The stylish coffee house at the Four Seasons Gresham Palace (see above) does excellent snacks, while the bar does fantastic cocktails in exquisite surroundings.

The enormous Central Kavehaz es Etterem (Karolyi Mihaly utca 9), has recently been restored to its former grandeur and it does great coffee and cake.

Nightlife

The Janis Pub (V. Kiralyi Pal utca 8), close to the university, which was named after singer Janis Joplin, is a great place for a drink or two. Negro, in downtown Pest (Szent István ter 11) is the smoothest bar in town and serves fantastic cocktails, while the club of the moment is Vittula (VII. Kertész utca 4).

Or join the heaving throng at Sark on the corner of Dob and Csanyi in the old Jewish district (VII. Klauzal ter 14) for some of the best live music in town. Cha Cha Cha Terasz (IX. Margitsziget, Kalvin ter subway) has a glam 70s feel to it and good DJs.

Shopping

Items to buy include embroidery and ceramics such as the famous Zsolnay porcelain, painted wooden toys and unusual foods and wines. Váci utca and Petõfi Sándor utca have the biggest concentration of glamorous and expensive shops. They are also an excellent place to grab a coffee and watch the world go by.

The city’s biggest market is the Nagycsarnok or Great Market (IX Vamhaz korut), which has three floors of fruit and veg, meat, cheese and Hungarian wines as well as traditional Magyar handicrafts – all significantly cheaper than in Váci utca. The Ecseri Piac, beginning at 156 Nagykorosi ut in district XIX, is one of the biggest and best flea markets in Central Europe.

The best bargain in Budapest is the Sunday brunch buffet at the Gundel, XIV. Allatkerti ut 2, 00 36 (1) 468 4040.

After brunch, pop next door to the zoo to see some of the city’s most amazing art nouveau architecture (00 36 (1) 273 4900, www.zoobudapest.com). Highlights include the elephant house and the palm house, which was erected by the Eiffel company of Paris.

Hungary’s pure fruit schnapps is called palinka.

Watch the chess-players who congregate around stone boards in the Széchenyi, the largest baths complex in Europe.

Gawp at some of the communist statuary that once decorated the city at Statue Park (Szoborpark), 15km from the city centre.

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